Riders Meaning in Insurance

Life insurance riders are additional coverages that not only provide enhanced coverage but also help in customising the life insurance policy according to one’s requirement and budget. Riders can be added to the life insurance policy at the time of policy issuance and renewals. There are several riders available in India such as Critical Illness, Accidental Death Benefit, Income Benefits, Waiver of Premium, Accelerated Terminal Illness, Hospital Cash Benefit, Accidental Total And Permanent Disability etc. Each and every rider has a different purpose and provides different types of coverage. One can choose a rider according to their requirements and budget. 

Riders are additional coverages which can be opted with life insurance policy in exchange of additional premium. They help in customising the life insurance policy according to an individual’s insurance requirements and help in increasing the coverage of the policy. 

Know The Importance Of Riders In A Life Insurance Policy

One can purchase a different rider along with your life insurance policy depending on your requirements. A life insurance rider not only enhances the life insurance policy but can be very very helpful from a financial point of view. Here are some reasons which justify the importance of riders in a life insurance policy:

1. No need for multiple policies

For a person who requires additional coverage/extra coverage, maintaining two or more policies at onces will be quite a hassle for different types of coverage. Riders can help in providing this additional coverage within a single policy. By purchasing a rider for your life insurance policy may increase your premium a bit. However, the premium for riders can be paid along with the premium for base coverage. 

2. Enhanced coverage

The most common reason why people choose to purchase a rider, is the availability of enhanced coverage that comes with the rider. The base coverage provided by the life insurance policy can be customised and enhanced with the help of riders. In simple words, an individual can get coverage for aspects which are not covered by the base life insurance policy. 

3. Affordable option

Life insurance is a very economical option keepin the range of benefits provided by riders. Purchasing separate policies for these additional coverages can be extremely costly. An appropriate choice of rider and life insurance policy can save an individual a lot of money for the long run.

4. Financial planning

An individual who is worried about the family’s future in case of their unforeseen demise should add riders to their life insurance policy to cover their finances accordingly. Riders can help in providing additional benefits to the family of the life assured in case an unforeseen event takes place. 

5. Tax benefits

An individual may have to pay additional premiums based on the rider they choose. The extra premium paid for the rider also qualifies for tax exemptions as per Section 80C of the Income Tax Act, 1961.

To Conclude

If you’re looking for an option to increase the base coverage of life insurance policy you should consider rider. There are several different kinds of rider, providing different types of coverage. Life insurance riders are affordable, one can choose a rider that is best suited according to his requirements, life insurance policy and budget. It is very essential to choose a right life insurance rider because riders can help in providing coverage for aspects which are not covered under the life insurance policy. 

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Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.